Some private gains are created by shifting costs onto others. The Accord prices those costs at the source: carbon, methane, speculation, systemic financial risk, pavement destruction, public-health harms, aquifer depletion, interchange extraction, and labor-market undercutting.
Distributed Healthcare bears the downstream cost of public-health harms. Tobacco-related disease, firearm injury, ultra-processed-food-driven metabolic disease — these costs are absorbed by the healthcare system and the affected individuals, while the upstream actors capture the margin without paying the externality.
The federal share of these downstream costs runs in the hundreds of billions per year across all categories combined: tobacco-related disease at ~$170B/year (per CDC); firearm-injury cost at ~$50–100B/year (per Everytown / Brookings); diet-related-disease cost (cardiovascular, type-2 diabetes, related metabolic conditions) much larger but harder to bound. The full bill flows through Medicare, Medicaid, VHA, and (under the Accord) Distributed Healthcare. The upstream producers face essentially none of it.
Source-priced excises calibrated to recover the downstream healthcare cost. Tobacco excise (existing federal-state structure intensified). Firearms excise at the manufacturer side. Sugar and ultra-processed-food excise scaled by published metabolic-load metrics (added-sugar content, refined-carbohydrate density, sodium-density above thresholds, etc.).
Revenue flows to the General Fund. The architecture is explicit that Distributed Healthcare is funded from the General Fund alongside every other federal program — not from earmarked excises. The ring-fenced-trust architecture is reserved for Climate Adaptation and Financial Stability only; all other priced externalities flow to the General Fund (per DNA Chapter 7 §"Ring-fenced trusts (only two)").
Manufacturers, importers, and distributors at source. Pass-through to consumers happens at the retail price level.
Therapeutic uses of regulated substances. Below-threshold sugar and processed-food categories. The architecture is calibrated as cost recovery — the goal is to shift production toward lower-harm formulations, not moral punishment of users.
Pending canonical scoring.
Revenue is moderate but the architectural intent is broader. Combined with the carbon fee and methane levy, the public-health excises form an externality-pricing stack covering the principal categories of harm priced at source. The architecture's commitment is that costs imposed on the broader population — climate damage, healthcare-system load, financial-stability risk — should be priced at the source that creates them, not absorbed by the population that bears them.
See tax ladder · fiscal scoring
- Cross-border-shopping
- Source collection at manufacturer/importer level. Imports face the same rate at customs entry; aligned jurisdictions in the Alliance Incentive network operate reciprocal coverage.
- Reformulation games
- Sugar / processed-food rates scaled by published metabolic-load metrics — incentivizes genuine reformulation toward lower-harm content rather than label-only changes.
- Carve-out lobbying
- Therapeutic-use exemptions are narrowly defined; ordinary food-and-beverage carve-outs do not exist. The architecture rejects exemption-laden rules that produce the regressive consumption-pattern failures of EU-style VAT carve-outs.
- Distributed Healthcare (Engine 2)
- Funded from General Fund; benefits from upstream-cost-recovery via these excises but does not depend on earmarked excise revenue.
- Carbon fee + methane levy
- Companion externality-pricing instruments. Health-risk excises price downstream healthcare cost; carbon/methane price upstream environmental cost.
- VAT
- Health-risk excises sit on top of VAT (consumers pay both on the affected products). The Pre-bate offsets the VAT incidence on bottom-decile households on consumption broadly.
Sugar and ultra-processed-food excises are regressive and paternalistic. Lower-income households consume these products more intensively; the excise reduces their consumption by raising prices, but the harm is to autonomy, not just to disease burden. Tobacco and alcohol excise have similar regressive incidence already; expanding to food extends a contested behavior-pricing regime further into household decisions.
The architecture is explicit on framing: cost recovery against downstream healthcare cost, not moral punishment. The excise on a sugary beverage is calibrated to the marginal healthcare cost it imposes on the system that everyone funds (Distributed Healthcare) — meaning the consumer who buys the product pays the externality the product creates. Other consumers are not subsidizing.
Regressivity is real but bounded by the broader Pre-bate architecture. Bottom-decile households receive ~$290/adult/month VAT Pre-bate plus the carbon Energy Stipend; net incidence on those households across the full Accord is progressive. The health-risk excise is one component of a larger architecture where the bottom decile receives net transfer.
Reformulation incentive matters: the metabolic-load metric scaling produces commercial pressure for product reformulation, which has historically been the single most effective public-health intervention (sugar reduction in UK soft drinks under the Soft Drinks Industry Levy is the recent canonical example).